In simple terms globalisation simply allows big, powerful western companies to move their production around the world to where the labour is cheapest and the health and safety regimes are slackest.
The exploitation works both ways…
Globalisation creates poverty and lowers standards of living across the planet and essentially offers an exploitative relationship between companies and peoples, surprisingly the exploitation goes both ways in that adults and children are pressed into service in foreign lands to make us things that we could easily make at home if only somebody would give us the chance. Despite this the big companies that engage in these exploitative practices still expect us to buy their products even if our combined purchasing power has been harmed by the fact that we used to work, but sadly we don’t anymore as we’ve been replaced by a child labourer in a faraway place. Jobs abroad equals jobs at home, it’s that simple.
The Human cost…
Big business will respond by saying that it’s all about costs, more specifically saving costs. To any accountant or hard nosed businessman saving costs is vitally important, anything you can do to shave off a penny here or there has got to be a good thing right? After all costs saved represents higher profits and higher profits has to be good for everyone you’d think. They also make the fair and valid point that if production was somehow cheaper at home then they would stay at home. It makes economic sense that whilst other companies and other countries are still engaged in this race to the bottom that we call Capitalism then they have no choice but to compete on the same terms. The main thrust of my own personal gripe with Capitalism and Globalisation in particular is that no one ever counts the human cost (which is a moral cost) and of course the cost to the state of keeping vast numbers of people on benefits for a lifetime when they could at least have the dignity of working and supporting themselves and their families without costing the state any money. In actual fact the state has everything to gain by not supporting globalisation and instead resorting to protectionism.
In my lifetime (and I hope that I’m only just about half way through it at the tender age of 42) I’ve seen all of our manufacturing and production base move abroad, long before there was India and China, there was East Europe, mostly Poland and Romania that reaped the benefits of globalisation. People tend to forget this but in the late eighties and nineties a great deal of work got relocated to the continent due to the fact that many of the former soviet economies of East Europe (which at that time were outside of the European Union) offered lax regulations and cheap labour, the toxic combination of which guaranteed to save companies money. Meanwhile entire communities saw their staple employment disappear in bleak times in which the jobs went away and never came back.
Enter the Comics
About ten years ago, I went to see some stand up comedians in Swansea’s Grand Theatre, two amusing guys from Australia hopped onto the stage and described in comedic terms lots of other places they had been to around the world and their observations about those places. One of the comics then explained that when visiting different towns he asked his audience members to describe the nature of their main industry. He foolishly went on to ask what the ‘main industry’ of Swansea was. No one replied. The theatre was packed that night! A more experienced comedian would have jumped off into something else, but not this guy, he kept at it and asked the question again. A timid voice replied that it was ‘local government’ that kept the city going.
Sad but true. Local government, the NHS, the Fire and Police services are supposed to be support services for the other stuff that goes on in the area, not the main industry. No one ever founded a town with nothing in it but the apparatus of maintaining the town. It’s like building a house that only has a frame, no floors, doors or walls. It’s a ridiculous but a commonplace scenario across most of South Wales, when the jobs go, it’s the public sector infrastructure that remains behind, usually as the biggest employer with the best wages.
People also forget that Wales was also sold off abroad by the national government as a low wages zone in order to entice big foreign business to the area. It can be argued that Wales has never recovered from this. It should also be remembered that most of the jobs created in this way have also gone to other nations for exactly the same reasons, the ones that remain only do so because of huge government subsidies and naked bribes to keep them here all of which serve to keep the cost of doing business in the Uk to a minimum.
The true purpose of the economy.
“The indispensible requirement for any economic system is that it must provide the material basis for life for a sufficient number of its citizens so that society can continue for another season. In addition, it must provide a sufficient surplus so that society can be re-populated and continue for another generation. If either of these conditions is not met, then society simply disappears and further discussion is unnecessary”
The economy is fundamentally broken when a man who had a job, no longer has one. The purpose of money is to replace the old barter system in which people swapped their produce with each other by using promissory notes and coins instead. In those days everyone was self sufficient and traded skills with one another to create a functioning economy in which one person might raise and swap pigs to the person who tended the fields and made crops or yet another person who made useful iron tools in the village forge.
It’s not always practical to trade physical things and livestock so it makes sense to trade things of equal value instead, that would be the origin of money and of course bartering in which each side of the transaction tries to talk up their value whilst lowering the value of the other persons offerings. This mechanism is often referred to as ‘price discovery’ which usually results in the two bartering parties settling somewhere in the middle and both walking away relatively happy.
It is worth noting that in this modern age, every price discovery mechanism on planet Earth is broken as the big players seek to hide knowledge from the other party as to the true value of the things they are selling. There’s another fundamental point to this, a true capitalist economy can only function when all participants have perfect knowledge. We keep getting told that capitalism is all about risk judged against potential rewards, so how can we successfully judge risk when the other party is going out of his way to deny obfuscate the true risk of doing business with them.
When money came along it meant that people without it can’t participate in the economy even though they might have something useful to offer, people want money now, no one wants to get paid in ducks or brick-laying anymore.
When you add automation into the mix, the economy further breaks down as machines now routinely do the work of hundreds of men, meaning that for every one man that works ninety nine might not be working. The end result may well be that products are now cheaper, but what good is a cheap product to you when you still can’t afford it? It’s still unobtainable. I would also point out that market activity is the one thing that makes prices drop as opposed to more efficient production techniques after all no drops prices when they have a monopoly, regardless of how cheap their production costs.
It should be understood that the economy should benefit everyone and participation should be open to all. It’s true to say that at the moment, this simply isn’t true.
Protectionism a remedy for all evils?
This situation isn’t something that is ever likely to change unless we revert to some good, old fashioned and honest protectionism. The government can make it cheaper to manufacture goods in this country overnight by imposing trade tariffs, slapping a punitive tax on anything brought in from abroad. This would have the immediate effect of encouraging new start up businesses in this country as well as providing a welcome boost for the exchequer that can be used to slim the structural deficit. Self sufficiency should be our mantra.
Punitive taxes are nothing new and are at the time of writing this article are being considered on junk foods as well as already being in place on alchohol and tabacco, so what’s wrong with a punitive tax on imports.
How about linking the tax to carbon and other pollutants. Doesn’t everybody understand that there’s so much wrong with the idea of shipping goods around the world aboard huge container ships, the output of just sixteen of them eclipses the amount of sulphur put into the atmosphere by all of the world’s cars. It is also worth noting that the combined output of the entire maritime shipping fleet represents 4-5% of global emissions of c02. The Uk in it’s entirety represents 4% of Global emissions.
Shipping is responsible for 18-30% of all the world’s nitrogen oxide pollution and 9% of the global sulphur oxide (SOx) pollution. A single large ship can generate about 5,000 tonnes of sulphur oxide pollution per year. A staggering 70% of all ship emissions are within 400km of land and 85% of all ship pollution is in the northern hemisphere. Maritime diesel fuel directly contributes to death more than any other fuel with an estimated 64,000 killed each year as a result of toxic fumes outputted by these vessels.
The point remains that making and transporting things locally has got to be better for mankind than shipping them across the entire globe.
Punitive import taxes would also encourage recycling and the maximising of lifespans of all manufactured items. Why throw something in the rubbish dump when it can be taken apart and it’s components used to refurbish existing items. If I buy a vacuum cleaner that breaks down it should of course be cheaper for me to get it repaired than replaced. It used to be like this in the 1970’s. If it can’t be repaired then what’s wrong with its good bits being used to repair other vacuum cleaners. This can also be a source of welcome employment for local people and as such is an incredibly useful service to your community. Indeed fostering close links with local tradespeople that source their materials locally probably would have the effect of enhancing the local sense of community and interconnectedness of people in which everyone plays a useful part.
Furthermore encouraging recycling in industry has to be better for the long term survival of the planet and the economy as to put it bluntly the Earth has finite resources which is a fact lost on industry at present that demand access to cheap minerals and cheaper materials as if such supplies were infinite. Our present capitalist system encourages scarcity of products when selling and pretends there’s no scarcity of resources when manufacturing. What happens when every last copper deposit has been mined? What happens when the Earth’s vast and rich iron ore deposits are used up. What happens when there’s no more trees to cut down. Living standards for both the rich and the poor disintegrate, that’s what happens.
What’s in it for me?
Jobs of course, more home employment, a bigger national economy and tax-take for the government which in turn means we can have a more affluent and better NHS or local council. Wouldn’t it be nice to see council tax drop? It could do if we returned to protectionism.
But what if another country does the same and puts a tax on our exported products?
Good it means they are looking after their citizens, don’t forget we don’t want their stuff, they shouldn’t want ours. If they are really desperate to sell to us, they can of course simply make it here and take advantage of our domestic market in which most people will be employed and thus much more likely to buy their stuff. The government would welcome this too. As new companies setting up shop here would employ people who in turn would pay taxes to the government even if the profits from their sales got sent abroad. There’s nothing wrong with selling in another country as long as that country benefits in some way. It’s a good way to end exploitation and an incentive to raise wages in countries where the locals would be unable to afford to buy your product until of course you pay them enough to do so. If you think this is unlikely you need to take a leaf out of Henry Ford’s book. He deliberately overpaid his employees so that they could buy his motorcars. This policy alone was instrumental in growing the Ford Motor Company to the greatness it has today.
What if another country makes a drug that we could use to cure cancer or some other debilitating disease?
Same as above, lets make it and distribute it here, the government or some pharmaceutical company could even license the rights to make it here. Indeed protectionism should never interfere with the free flow of information or data as information and data are essential to stimulate demand. If a doctor doesn’t know that there’s a cure for cancer how can he demand it for his patients!
That’s all well and good with imported things, but what about food?
Have you seen the countryside lately, it’s empty, there’s plenty of space to grow food and plenty of science around to grow summertime foods all through the year.
Some countries are desperately poor and need the employment provided to them by globalisation, won’t protectionism badly affect them?
The short answer is no! If manufacturing is going on in an undeveloped country then it should be because it’s citizens need the goods that are being manufactured, not because they are in an exploitable position. We need morality in business that sadly seems to be missing these days. The governments of these countries really need to foster home grown industries that can lift their citizens out of poverty, because the day will come when some other country can make things for a fraction of a penny less and the manufacturing base they used to enjoy will simply move out and move on to the new bottom rate. This will be worse for their citizens than anything else and is tantamount to economic rape!
Indeed there is economic evidence that supports the historical fact that Western Europe and the United States of America would never have grown to be the powers that they are without economic protectionism.
Protectionism puts people first, it’s the duty of the state to look after it’s citizens and put their needs first over and above that required by big business. Given that the free for all of big business has raped the globe and put every single country on Earth in a position of bankruptcy and created unfair divisions of wealth at home it’s time to give protectionism the chance it deserves.
I did that!
Protectionism promises a future for our young children who by and large desperately want to work and contribute to the country they live in. By this same token protectionism also stimulates national and local pride. the type of pride you can only have when you’ve contributed to something.
The king of Thailand for example preaches self sufficiency and slaps massive import taxes on produce coming into the county, he clearly sees self sufficiency in the same way that we used to as evidenced by the following link.
Who is against it?
Well obviously the existing vested interests that pick up and drop whole countries based on their labour rates and tax climate. The people have effectively turned our elected representatives into middle managers by dictating policy to them via diverse tactics that range from lobbying in which a single dinner with a government agent and a quick bribe results in changes to government policy and outright threats to leave and take their tax share with them to another country. Being fear driven most politicians try hard to keep corporate interests happy, despite the fact that fair trade has turned into free exploitation of citizens across the world and that the idea of levelling a playing field by dismantling trade barriers has only ever been a fantasy at best.
A level playing field is only possible when all countries either share the same currency or have currencies of equal value and equal costs in other areas, i.e the same degree of health and safety and labour regulations. Given that there is approximately one hundred and fifty countries on Earth, each of which is now a state of competition with one another this synchronisation can never, ever happen. So much for a level playing field.
Given that the same people have advocated economic policies that have bankrupted every nation on earth (I am not joking) and only served to drain the wealth away from the working and middle classes putting it firmly into the hands of the ruling elite. None of which have any concerns about the damage being done to the country in terms of money lost, lives broken and communities destroyed we should ignore them and demand some good, old fashioned, honest protectionism, it’s the moral thing to do…